Comparing iHeartMedia (NASDAQ:IHRT) & Omnicom Group (NYSE:OMC)

Omnicom Group (NYSE:OMC) and iHeartMedia (NASDAQ:IHRT) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Omnicom Group and iHeartMedia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omnicom Group	2	5	4	0	2.18
iHeartMedia	2	1	0	0	1.33

Omnicom Group presently has a consensus target price of $99.00, suggesting a potential upside of 32.58%. iHeartMedia has a consensus target price of $4.25, suggesting a potential upside of 88.05%. Given iHeartMedia’s higher possible upside, analysts clearly believe iHeartMedia is more favorable than Omnicom Group.

Insider & Institutional Ownership

92.0% of Omnicom Group shares are held by institutional investors. Comparatively, 93.9% of iHeartMedia shares are held by institutional investors. 1.2% of Omnicom Group shares are held by insiders. Comparatively, 10.2% of iHeartMedia shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Omnicom Group and iHeartMedia”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omnicom Group	$17.27 billion	1.19	-$54.50 million	$1.16	64.37
iHeartMedia	$3.86 billion	0.09	-$472.87 million	($1.82)	-1.24

Omnicom Group has higher revenue and earnings than iHeartMedia. iHeartMedia is trading at a lower price-to-earnings ratio than Omnicom Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Omnicom Group has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, iHeartMedia has a beta of 2.19, indicating that its share price is 119% more volatile than the S&P 500.

Profitability

This table compares Omnicom Group and iHeartMedia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omnicom Group	1.74%	24.73%	5.15%
iHeartMedia	-7.18%	N/A	-1.12%

Summary

Omnicom Group beats iHeartMedia on 10 of the 14 factors compared between the two stocks.

About Omnicom Group

Omnicom Group Inc., together with its subsidiaries, offers advertising, marketing, and corporate communications services. It provides a range of services in the areas of advertising and media, precision marketing, commerce and branding, experiential, execution and support, public relations, and healthcare. The company's services include advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing and post-production, digital transformation consulting, entertainment marketing, experiential marketing, field marketing, sales support, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and instore design services. Its services also comprise interactive marketing, investor relations, marketing research, media planning and buying, retail media planning and buying, merchandising and point of sale, mobile marketing, multi-cultural marketing, non-profit marketing, organizational communications, package design, product placement, promotional marketing, public affairs, public relations, retail marketing, retail media and e-commerce, search engine marketing, shopper marketing, social media marketing, and sports and event marketing services. It operates in the North and Latin America, Europe, the Middle East and Africa (EMEA), and the Asia Pacific. The company was incorporated in 1944 and is based in New York, New York.

About iHeartMedia

iHeartMedia, Inc. operates as an audio media company in the United States and internationally. It operates through three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group segment offers broadcast radio stations, sponsorship and events, and live and virtual events; and operates Premiere Networks, a national radio network that produces, distributes, or represents syndicated radio programs and services to radio station affiliates. It also delivers real-time traffic flow and incident information, and weather updates, sports, and news. The Digital Audio Group segment provides podcasting, digital sites, newsletters, digital services, and programs; and iHeartRadio, a mobile app and web based service for radio stations, digital only stations, custom artist stations, and podcasts. The Audio and Media Services Group segment engages in the media representation business; and provides scheduling and broadcast software and services. This segment also provides RCS, a cloud and on-premises broadcast software, such as radio and television automation, music scheduling, newsroom automation, advertising sales management, disaster recovery solutions; and real-time audio recognition technology to radio and television stations, cable channels, record labels, advertisers, and agencies, as well as media streaming and research services. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. The company is headquartered in San Antonio, Texas.